September 6, 2007

Knobias Clip Report (9-6-2007)

By admin

Interim analysis of a 16-week Fast-Tracked Phase 3 blinded clinical trial of Accentia Biopharmaceuticals Inc.’s (ABPI) SinuNase(TM) (intranasal amphotericin B 0.01% suspension) for the treatment of refractory chronic sinusitis has been completed. The study has shown improvement in polyposis in about 50% of patients and improvement in sinus inflammation in approximately 50% of patients. Moreover, the interim data shows that almost 50% of these patients with objective evidence of improvement have achieved the primary endpoint of complete resolution of the two key symptoms. If analysis of unblinded data at the conclusion of the trial documents that SinuNase is indeed effective by Week 4, the second pivotal Phase 3 trial may be adjusted to be an 8-week trial rather than 16-weeks.

CEO Dr. Frank O’Donnell, Jr. told Knobias on Wednesday, “It is estimated that 37 million Americans suffer fom chronic sinusitis, Some say it is a larger market then Asthma, yet there are no FDA approved treatments. If Accentia captures only 1% percent of the market, that could equate to close to a billion dollars in revenue. Phase 3 should be completed by the end of 2007.”

He added, “Our next drug in the Phase 3 line-up is Biovaxid(TM), a non-Hodgkins lymphoma personalized cancer vaccine that has shown remarkable data in it 10 years in development at the National Cancer Institue. Research has shown that not only are their few side effects, all but those who did relapse after vaccination had their second remission become longer than the first. That’s a total change in what happens to patients with the current therapy.”

“We also just filed a preliminary Investigational New Drug (pre-IND) application to meet with the FDA to start Phase three for Reimmune to treat auto immune diseases. We are aiming at Multiple Sclerosis as the first Phase Three clinical trial. Revimmune uses an ultra-high intensity, short-course of an intravenous formulation of an approved drug (cyclophosphamide), in a new patent-pending method to “reboot” a patient’s immune system, thereby eliminating the autoimmunity, whereas current therapies including oral cyclophosphamide are used chronically to try to suppress the inflammation of autoimmunity. Based on long-term follow-up data showing complete remissions, there is substantial evidence that Revimmune has the potential to cure cases of severe refractory autoimmune diseases such as aplastic anemia and myasthenia gravis.”

“Revimmune would be the first therapy to propose restoration of neurologic function as the primary endpoint and the first to offer the potential for elimination of the autoimmunity responsible for multiple sclerosis.”

Accentia owns 68% of Biovest International (BVTI). Biovest has a market cap of about $56 million which gives Accentia roughly $40 million in value. Accentia, through contracts will receive a 19.5% royalty on all revenue from the Biovest product line. Biovest is also marketing Autovaxid(TM), which is a self contained automated cell growth instrument. This small product could replace current cell growth instruments that are ten times the size.

Dr. O’Donnell explained, “As Biovest self-funds its operations, Accentia ownership will decrease as new shares enter the market.”

At June 30, 2007, the Company had a working capital deficit of $52.6 million and $4.3 million in cash and cash equivalents. Net sales for the three months ended June 30, 2007 were $3.8 million, compared with $5.7 million for the same period a year ago. Third quarter net loss per share was $0.71, compared with a consolidated loss per share of $0.40 for the same period last year.

He noted, “Losses were due to increased research and development for both SinuNase and BiovaxID.”

Dr. O’Donnell concluded, “We are an emerging biotech company that boasts a tiny $65 million market capitalization. The company already does about $20 million in revenue and our two Phase 3 FDA fast tracked drugs could put the company on the map. We could reach profitability in 2008 from a commercial partnership on SinuNase and/or BiovaxID.”

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